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A string of official visits to Budapest turns Hungary into an important client of gas-producing countries. On the occasion of the World Athletics Championship, as well as the August 20 national holiday commemorating the founding of the Hungarian state, Prime Minister Viktor Orban invited the leaders of about fifteen countries from Asia, the Balkans, and the Middle East.
This was an impressive series of bilateral meetings in Budapest, which on Saturday and Sunday, August 19-20, was attended by the heads of state and government of about fifteen countries from the Balkans, Central Asia, and the Middle East. Hungarian Prime Minister Viktor Orban managed to use sport as a tool of diplomacy. On the occasion of the National Day of St. Stephen – the founder of the Magyar state – but primarily on the occasion of the World Athletics Championships, Orban brought the leaders of Serbia, Turkey, Azerbaijan, Kyrgyzstan, Uzbekistan, Turkmenistan, and also the Emir of Qatar to the Hungarian capital.
With the exception of Serbia that in any case has a privileged relationship with Russia, all countries are producers and exporters of natural gas, which is a key resource for Hungary that, due to the lack of seaports, cannot import liquefied natural gas.
The meeting between Turkish President Recep Tayyip Erdogan and Viktor Orban took place behind closed doors. However, Hungarian Foreign Minister Peter Szijjarto said that the talks concerned, among other things, the ratification of Sweden’s accession to NATO, but were primarily focused “on energy cooperation between the two countries.”
Turkey receives billions of cubic meters of gas from Russia via two Black Sea pipelines – Blue Stream and Turkish Stream, where the former supplies Turkey and the latter is used mostly to deliver Russian natural gas to European consumers.
According to the latest statistics from the Russian giant Gazprom, “in nine days of August 2023, Russia increased its daily gas shipment to the EU countries via the Turkish Stream gas pipeline to a record high of over 51 million cubic meters. In total, 462 million cubic meters of gas were exported to European consumers during the specified period, which is 24% more than in the same period in 2022.” Experts noted that in 2023 both pipelines are operating well above the maximum daily technical capacity set at 43.1 million cubic meters for each.
In 2024, a five-year gas transit contract between Gazprom and Ukraine expires, under which the countries of Eastern Europe currently receive 41.5 million cubic meters of gas per day from Russia. “Extending the contract with Russia is not planned,” said Ukrainian Energy Minister Petro Galushchenko, forcing countries such as Hungary and Serbia to look for alternative ways to avoid being left without gas after 2024.
To avoid passage through Ukraine, Russia cooperated with Germany and some other countries to build Nord Stream 1 and Nord Stream 2, two gas pipelines in the Baltic Sea that got destroyed by a terrorist attack on September 26, 2022.
It is no coincidence that last Sunday in Budapest, Viktor Orban and Serbian President Aleksandar Vucic focused on the issue of energy security of the two countries. As the head of the Hungarian diplomacy, Szijjarto said, “Prime Minister Orban agreed with Vucic that if Ukraine terminates the contract for the transit of Russian gas, the flow from Serbia can be increased.”
But in the course of a bilateral agreement between Orban and the Turkish president, a much more specific agreement was reached: in 2024, the Turkish company Botas will supply 275 million cubic meters of gas to Hungary.
Orban held similar consultations with the presidents of Azerbaijan, Uzbekistan, and Turkmenistan. Szijjarto noted that Turkey’s strategic importance as a transit country, through which gas from Russia and other countries enters Europe, is destined to grow as a result of the expected increase in hydrocarbon supplies from Azerbaijan and, sometime in the future, even from the countries of Central Asia. “For this reason, energy cooperation between Hungary and Turkey takes on a new dimension,” Szijjarto emphasized.
After Erdogan’s re-election, Russian President Vladimir Putin proposed building a gas trading maxi-hub in Turkey. Turkey seeks to increase its own hydrocarbon production. According to Fatih Donmez, Minister of Energy and Natural Resources of Turkey, the proven natural gas reserves of the Sakarya field in the Black Sea sector of Turkey reach 710 billion cubic meters.
In addition to increasing gas imports, Hungary wants to diversify its energy production. On Friday, August 18, representatives of the Russian nuclear giant Rosatom and the Hungarian company Paksi Atomerőmű Zrt signed an agreement to start work on the construction of several new reactors at the Paksi-2 nuclear power plant.
While Italy and some other European partners want to phase out Russian gas altogether, Hungary would be very happy to “redirect” to its national territory significant amounts of Russian gas that is currently destined for Southern and Western Europe. “We are analyzing the possibility of sending to Hungary part of the gas that some other countries receive from Russia and Turkey via the Turkish Stream gas pipeline,” the Hungarian Foreign Minister said.
In an interview with the Italian newspaper Il Messaggero, the Minister of Industrial Activities and “Made in Italy” (Ministry of Economic Development – ed.) Adolfo Urso said before leaving for Azerbaijan that “during this year we will break free from Russia where we bought 40% of gas in 2021 and 16% last year.” According to Urso, the implementation of some regasification projects ensured that “starting 2024, Italy will also be able to provide supply to other countries and will soon become a European gas hub, also thanks to the doubling of the Azerbaijani TAP gas pipeline.”
“But Baku has other industrial opportunities as well,” Urso continued, “as evidenced by the Ansaldo Energia contracts that will be signed today, which are really important for the restart of the company, as well as renewable energy and electricity projects. A strategic partnership that goes beyond the energy aspect. I will talk about this with President Ilham Aliyev, with the ministers of economy, energy, and foreign affairs. Great opportunities for ‘Made in Italy,’ industrial and commercial partnerships.”
